Ninth Circuit Rejects “Trademark Disparagement” As A Cause of Action Under The Lanham Act
Case: Freecycle Network, Inc. v. Oey, No. 06-16219 (9th Cir. 9/26/07)
The One Sentence Summary: Plaintiff’s preliminary injunction preventing defendant “from making any comments that could be construed as to disparage upon [plaintiff's] possible trademark and logo” was vacated because defendant’s actions were not a “use in commerce,” created no likelihood of confusion, and did not disparage plaintiff’s products or services; and to the extent the injunction was based on a “trademark disparagement” claim under the Lanham Act, the district court abused its discretion because no such cause of action exists under the Act.
What They Were Fighting About: Plaintiff, a nonprofit corporation “dedicated to encouraging and coordinating the reusing, recycling, and gifting of goods,” sought to obtain trademark protection for its marks, “The Freecycle Network,” and “Freecycle.” The term “freecycle,” however, had previously been used to refer more generally to the act of recycling goods for free via the internet. Defendant made various statements on the internet that plaintiff lacked trademark rights in “freecycle” because it was a generic term, and he encouraged others to use the term in its generic sense and to write letters to the United States Patent and Trademark Office opposing plaintiff’s pending registration. Plaintiff sued, alleging that the defendant’s statements constituted contributory trademark infringement and trademark disparagement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), as well as injurious falsehood, defamation, and intentional interference with a business relationship under Arizona law. The district court granted a preliminary injunction.
Ninth Circuit Holdings:
The One Sentence Summary: Plaintiff’s preliminary injunction preventing defendant “from making any comments that could be construed as to disparage upon [plaintiff's] possible trademark and logo” was vacated because defendant’s actions were not a “use in commerce,” created no likelihood of confusion, and did not disparage plaintiff’s products or services; and to the extent the injunction was based on a “trademark disparagement” claim under the Lanham Act, the district court abused its discretion because no such cause of action exists under the Act.
What They Were Fighting About: Plaintiff, a nonprofit corporation “dedicated to encouraging and coordinating the reusing, recycling, and gifting of goods,” sought to obtain trademark protection for its marks, “The Freecycle Network,” and “Freecycle.” The term “freecycle,” however, had previously been used to refer more generally to the act of recycling goods for free via the internet. Defendant made various statements on the internet that plaintiff lacked trademark rights in “freecycle” because it was a generic term, and he encouraged others to use the term in its generic sense and to write letters to the United States Patent and Trademark Office opposing plaintiff’s pending registration. Plaintiff sued, alleging that the defendant’s statements constituted contributory trademark infringement and trademark disparagement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), as well as injurious falsehood, defamation, and intentional interference with a business relationship under Arizona law. The district court granted a preliminary injunction.
Ninth Circuit Holdings:
- Defendant’s actions were outside the scope of the Lanham Act because his actions likely did not constitute a “use in commerce” given that his internet postings were not made “to promote any competing service or reap any commercial benefit whatsoever.”
- Although plaintiff’s complaint alleged “trademark disparagement” under § 1125(a), no such claim exists under the Lanham Act. “That the Lanham Act’s text does not contemplate a trademark disparagement claim is borne out by the absolute dearth of precedent analyzing such a claim under the Act.”
- To the extent plaintiff argued that defendant should be prevented from using plaintiff’s claimed mark FREECYCLE in its generic sense, the court held that plaintiff’s “asserted mark — like all marks - is always at risk of becoming generic and thereby losing its ability to identify the trademark holder’s goods or services. . . . The Lanham Act itself, however, contains no provision preventing the use of a trademarked term in its generic sense.”
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